Starting small<\/a> is the corner for those just getting off the ground. Learn about how to make that first hire, deal with all things administrative, and set yourself up for success.<\/em><\/p>\n\n\n\nChances are you\u2019ve heard of a holding company before, but you might be unsure about how they work. These types of business entities are unique among LLCs, as they don\u2019t provide any services or produce any goods. Instead, holding companies exist purely to own\u2014or to hold<\/em>\u2014other companies.<\/p>\n\n\n\r\n
in this story<\/div>\r\n \r\n
\r\n \r\n \r\n What is a holding company?\r\n \r\n \r\n\r\n FD8B74A2-3372-42BA-99CD-BCC6C3C6EA13@1x<\/title>\r\n <defs>\r\n <filter id=\"filter-1\">\r\n <feColorMatrix in=\"SourceGraphic\" type=\"matrix\" values=\"0 0 0 0 0.000000 0 0 0 0 0.000000 0 0 0 0 0.000000 0 0 0 1.000000 0\"><\/feColorMatrix>\r\n <\/filter>\r\n <\/defs>\r\n <g id=\"Iconography\" stroke=\"none\" stroke-width=\"1\" fill=\"none\" fill-rule=\"evenodd\">\r\n <g id=\"icon\/arrow-down\/outline\/16\">\r\n <rect id=\"Bounding-box\" x=\"0\" y=\"0\" width=\"16\" height=\"16\"><\/rect>\r\n <g filter=\"url(#filter-1)\" id=\"Icon\">\r\n <g transform=\"translate(7.500000, 8.000000) scale(-1, -1) rotate(-90.000000) translate(-7.500000, -8.000000) translate(0.000000, 1.500000)\">\r\n <polygon id=\"Path\" fill=\"#000000\" fill-rule=\"nonzero\" points=\"8.75 0.792893219 14.4571068 6.5 8.75 12.2071068 8.04289322 11.5 12.542 6.99989322 0.5 7 0.5 6 12.542 5.99989322 8.04289322 1.5\"><\/polygon>\r\n <\/g>\r\n <\/g>\r\n <\/g>\r\n <\/g>\r\n<\/svg> <\/span>\r\n <\/a>\r\n <\/li>\r\n <li class=\"toc-block__list-item\">\r\n <a href=\"#purpose-of-a-holding-company\" class=\"toc-block__link\">\r\n Purpose of a holding company\u00a0\r\n <span class=\"toc-block__icon\">\r\n <?xml version=\"1.0\" encoding=\"UTF-8\"?>\r\n<svg width=\"16px\" height=\"16px\" viewBox=\"0 0 16 16\" version=\"1.1\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" xmlns:xlink=\"http:\/\/www.w3.org\/1999\/xlink\">\r\n <title>FD8B74A2-3372-42BA-99CD-BCC6C3C6EA13@1x<\/title>\r\n <defs>\r\n <filter id=\"filter-1\">\r\n <feColorMatrix in=\"SourceGraphic\" type=\"matrix\" values=\"0 0 0 0 0.000000 0 0 0 0 0.000000 0 0 0 0 0.000000 0 0 0 1.000000 0\"><\/feColorMatrix>\r\n <\/filter>\r\n <\/defs>\r\n <g id=\"Iconography\" stroke=\"none\" stroke-width=\"1\" fill=\"none\" fill-rule=\"evenodd\">\r\n <g id=\"icon\/arrow-down\/outline\/16\">\r\n <rect id=\"Bounding-box\" x=\"0\" y=\"0\" width=\"16\" height=\"16\"><\/rect>\r\n <g filter=\"url(#filter-1)\" id=\"Icon\">\r\n <g transform=\"translate(7.500000, 8.000000) scale(-1, -1) rotate(-90.000000) translate(-7.500000, -8.000000) translate(0.000000, 1.500000)\">\r\n <polygon id=\"Path\" fill=\"#000000\" fill-rule=\"nonzero\" points=\"8.75 0.792893219 14.4571068 6.5 8.75 12.2071068 8.04289322 11.5 12.542 6.99989322 0.5 7 0.5 6 12.542 5.99989322 8.04289322 1.5\"><\/polygon>\r\n <\/g>\r\n <\/g>\r\n <\/g>\r\n <\/g>\r\n<\/svg> <\/span>\r\n <\/a>\r\n <\/li>\r\n <li class=\"toc-block__list-item\">\r\n <a href=\"#advantages-of-a-holding-company\" class=\"toc-block__link\">\r\n Advantages of a holding company\r\n <span class=\"toc-block__icon\">\r\n <?xml version=\"1.0\" encoding=\"UTF-8\"?>\r\n<svg width=\"16px\" height=\"16px\" viewBox=\"0 0 16 16\" version=\"1.1\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" xmlns:xlink=\"http:\/\/www.w3.org\/1999\/xlink\">\r\n <title>FD8B74A2-3372-42BA-99CD-BCC6C3C6EA13@1x<\/title>\r\n <defs>\r\n <filter id=\"filter-1\">\r\n <feColorMatrix in=\"SourceGraphic\" type=\"matrix\" values=\"0 0 0 0 0.000000 0 0 0 0 0.000000 0 0 0 0 0.000000 0 0 0 1.000000 0\"><\/feColorMatrix>\r\n <\/filter>\r\n <\/defs>\r\n <g id=\"Iconography\" stroke=\"none\" stroke-width=\"1\" fill=\"none\" fill-rule=\"evenodd\">\r\n <g id=\"icon\/arrow-down\/outline\/16\">\r\n <rect id=\"Bounding-box\" x=\"0\" y=\"0\" width=\"16\" height=\"16\"><\/rect>\r\n <g filter=\"url(#filter-1)\" id=\"Icon\">\r\n <g transform=\"translate(7.500000, 8.000000) scale(-1, -1) rotate(-90.000000) translate(-7.500000, -8.000000) translate(0.000000, 1.500000)\">\r\n <polygon id=\"Path\" fill=\"#000000\" fill-rule=\"nonzero\" points=\"8.75 0.792893219 14.4571068 6.5 8.75 12.2071068 8.04289322 11.5 12.542 6.99989322 0.5 7 0.5 6 12.542 5.99989322 8.04289322 1.5\"><\/polygon>\r\n <\/g>\r\n <\/g>\r\n <\/g>\r\n <\/g>\r\n<\/svg> <\/span>\r\n <\/a>\r\n <\/li>\r\n <li class=\"toc-block__list-item\">\r\n <a href=\"#disadvantages-of-a-holding-company\" class=\"toc-block__link\">\r\n Disadvantages of a holding company\r\n <span class=\"toc-block__icon\">\r\n <?xml version=\"1.0\" encoding=\"UTF-8\"?>\r\n<svg width=\"16px\" height=\"16px\" viewBox=\"0 0 16 16\" version=\"1.1\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" xmlns:xlink=\"http:\/\/www.w3.org\/1999\/xlink\">\r\n <title>FD8B74A2-3372-42BA-99CD-BCC6C3C6EA13@1x<\/title>\r\n <defs>\r\n <filter id=\"filter-1\">\r\n <feColorMatrix in=\"SourceGraphic\" type=\"matrix\" values=\"0 0 0 0 0.000000 0 0 0 0 0.000000 0 0 0 0 0.000000 0 0 0 1.000000 0\"><\/feColorMatrix>\r\n <\/filter>\r\n <\/defs>\r\n <g id=\"Iconography\" stroke=\"none\" stroke-width=\"1\" fill=\"none\" fill-rule=\"evenodd\">\r\n <g id=\"icon\/arrow-down\/outline\/16\">\r\n <rect id=\"Bounding-box\" x=\"0\" y=\"0\" width=\"16\" height=\"16\"><\/rect>\r\n <g filter=\"url(#filter-1)\" id=\"Icon\">\r\n <g transform=\"translate(7.500000, 8.000000) scale(-1, -1) rotate(-90.000000) translate(-7.500000, -8.000000) translate(0.000000, 1.500000)\">\r\n <polygon id=\"Path\" 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stroke-width=\"1\" fill=\"none\" fill-rule=\"evenodd\">\r\n <g id=\"icon\/arrow-down\/outline\/16\">\r\n <rect id=\"Bounding-box\" x=\"0\" y=\"0\" width=\"16\" height=\"16\"><\/rect>\r\n <g filter=\"url(#filter-1)\" id=\"Icon\">\r\n <g transform=\"translate(7.500000, 8.000000) scale(-1, -1) rotate(-90.000000) translate(-7.500000, -8.000000) translate(0.000000, 1.500000)\">\r\n <polygon id=\"Path\" fill=\"#000000\" fill-rule=\"nonzero\" points=\"8.75 0.792893219 14.4571068 6.5 8.75 12.2071068 8.04289322 11.5 12.542 6.99989322 0.5 7 0.5 6 12.542 5.99989322 8.04289322 1.5\"><\/polygon>\r\n <\/g>\r\n <\/g>\r\n <\/g>\r\n <\/g>\r\n<\/svg> <\/span>\r\n <\/a>\r\n <\/li>\r\n <li class=\"toc-block__list-item\">\r\n <a href=\"#how-to-start-a-holding-company\" class=\"toc-block__link\">\r\n How to start a holding company\r\n <span class=\"toc-block__icon\">\r\n <?xml version=\"1.0\" encoding=\"UTF-8\"?>\r\n<svg width=\"16px\" height=\"16px\" viewBox=\"0 0 16 16\" version=\"1.1\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" xmlns:xlink=\"http:\/\/www.w3.org\/1999\/xlink\">\r\n <title>FD8B74A2-3372-42BA-99CD-BCC6C3C6EA13@1x<\/title>\r\n <defs>\r\n <filter id=\"filter-1\">\r\n <feColorMatrix in=\"SourceGraphic\" type=\"matrix\" values=\"0 0 0 0 0.000000 0 0 0 0 0.000000 0 0 0 0 0.000000 0 0 0 1.000000 0\"><\/feColorMatrix>\r\n <\/filter>\r\n <\/defs>\r\n <g id=\"Iconography\" stroke=\"none\" stroke-width=\"1\" fill=\"none\" fill-rule=\"evenodd\">\r\n <g id=\"icon\/arrow-down\/outline\/16\">\r\n <rect id=\"Bounding-box\" x=\"0\" y=\"0\" width=\"16\" height=\"16\"><\/rect>\r\n <g filter=\"url(#filter-1)\" id=\"Icon\">\r\n <g transform=\"translate(7.500000, 8.000000) scale(-1, -1) rotate(-90.000000) translate(-7.500000, -8.000000) translate(0.000000, 1.500000)\">\r\n <polygon id=\"Path\" fill=\"#000000\" fill-rule=\"nonzero\" points=\"8.75 0.792893219 14.4571068 6.5 8.75 12.2071068 8.04289322 11.5 12.542 6.99989322 0.5 7 0.5 6 12.542 5.99989322 8.04289322 1.5\"><\/polygon>\r\n <\/g>\r\n <\/g>\r\n <\/g>\r\n <\/g>\r\n<\/svg> <\/span>\r\n <\/a>\r\n <\/li>\r\n <li class=\"toc-block__list-item\">\r\n <a href=\"#holding-company-vs-an-llc\" class=\"toc-block__link\">\r\n Holding company vs. an LLC\r\n <span class=\"toc-block__icon\">\r\n <?xml version=\"1.0\" encoding=\"UTF-8\"?>\r\n<svg width=\"16px\" height=\"16px\" viewBox=\"0 0 16 16\" version=\"1.1\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" xmlns:xlink=\"http:\/\/www.w3.org\/1999\/xlink\">\r\n <title>FD8B74A2-3372-42BA-99CD-BCC6C3C6EA13@1x<\/title>\r\n <defs>\r\n <filter id=\"filter-1\">\r\n <feColorMatrix in=\"SourceGraphic\" type=\"matrix\" values=\"0 0 0 0 0.000000 0 0 0 0 0.000000 0 0 0 0 0.000000 0 0 0 1.000000 0\"><\/feColorMatrix>\r\n <\/filter>\r\n <\/defs>\r\n <g id=\"Iconography\" stroke=\"none\" stroke-width=\"1\" fill=\"none\" fill-rule=\"evenodd\">\r\n <g id=\"icon\/arrow-down\/outline\/16\">\r\n <rect id=\"Bounding-box\" x=\"0\" y=\"0\" width=\"16\" height=\"16\"><\/rect>\r\n <g filter=\"url(#filter-1)\" id=\"Icon\">\r\n <g transform=\"translate(7.500000, 8.000000) scale(-1, -1) rotate(-90.000000) translate(-7.500000, -8.000000) translate(0.000000, 1.500000)\">\r\n <polygon id=\"Path\" fill=\"#000000\" fill-rule=\"nonzero\" points=\"8.75 0.792893219 14.4571068 6.5 8.75 12.2071068 8.04289322 11.5 12.542 6.99989322 0.5 7 0.5 6 12.542 5.99989322 8.04289322 1.5\"><\/polygon>\r\n <\/g>\r\n <\/g>\r\n <\/g>\r\n <\/g>\r\n<\/svg> <\/span>\r\n <\/a>\r\n <\/li>\r\n <li class=\"toc-block__list-item\">\r\n <a href=\"#holding-company-vs-a-parent-company\" class=\"toc-block__link\">\r\n Holding company vs. a parent company\r\n <span class=\"toc-block__icon\">\r\n <?xml version=\"1.0\" encoding=\"UTF-8\"?>\r\n<svg width=\"16px\" height=\"16px\" viewBox=\"0 0 16 16\" version=\"1.1\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" xmlns:xlink=\"http:\/\/www.w3.org\/1999\/xlink\">\r\n <title>FD8B74A2-3372-42BA-99CD-BCC6C3C6EA13@1x<\/title>\r\n <defs>\r\n <filter id=\"filter-1\">\r\n <feColorMatrix in=\"SourceGraphic\" type=\"matrix\" values=\"0 0 0 0 0.000000 0 0 0 0 0.000000 0 0 0 0 0.000000 0 0 0 1.000000 0\"><\/feColorMatrix>\r\n <\/filter>\r\n <\/defs>\r\n <g id=\"Iconography\" stroke=\"none\" stroke-width=\"1\" fill=\"none\" fill-rule=\"evenodd\">\r\n <g id=\"icon\/arrow-down\/outline\/16\">\r\n <rect id=\"Bounding-box\" x=\"0\" y=\"0\" width=\"16\" height=\"16\"><\/rect>\r\n <g filter=\"url(#filter-1)\" id=\"Icon\">\r\n <g transform=\"translate(7.500000, 8.000000) scale(-1, -1) rotate(-90.000000) translate(-7.500000, -8.000000) translate(0.000000, 1.500000)\">\r\n <polygon id=\"Path\" fill=\"#000000\" fill-rule=\"nonzero\" points=\"8.75 0.792893219 14.4571068 6.5 8.75 12.2071068 8.04289322 11.5 12.542 6.99989322 0.5 7 0.5 6 12.542 5.99989322 8.04289322 1.5\"><\/polygon>\r\n <\/g>\r\n <\/g>\r\n <\/g>\r\n <\/g>\r\n<\/svg> <\/span>\r\n <\/a>\r\n <\/li>\r\n <li class=\"toc-block__list-item\">\r\n <a href=\"#examples-of-holding-companies\" class=\"toc-block__link\">\r\n Examples of holding companies\r\n <span class=\"toc-block__icon\">\r\n <?xml version=\"1.0\" encoding=\"UTF-8\"?>\r\n<svg width=\"16px\" height=\"16px\" viewBox=\"0 0 16 16\" version=\"1.1\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" xmlns:xlink=\"http:\/\/www.w3.org\/1999\/xlink\">\r\n <title>FD8B74A2-3372-42BA-99CD-BCC6C3C6EA13@1x<\/title>\r\n <defs>\r\n <filter id=\"filter-1\">\r\n <feColorMatrix in=\"SourceGraphic\" type=\"matrix\" values=\"0 0 0 0 0.000000 0 0 0 0 0.000000 0 0 0 0 0.000000 0 0 0 1.000000 0\"><\/feColorMatrix>\r\n <\/filter>\r\n <\/defs>\r\n <g id=\"Iconography\" stroke=\"none\" stroke-width=\"1\" fill=\"none\" fill-rule=\"evenodd\">\r\n <g id=\"icon\/arrow-down\/outline\/16\">\r\n <rect id=\"Bounding-box\" x=\"0\" y=\"0\" width=\"16\" height=\"16\"><\/rect>\r\n <g filter=\"url(#filter-1)\" id=\"Icon\">\r\n <g transform=\"translate(7.500000, 8.000000) scale(-1, -1) rotate(-90.000000) translate(-7.500000, -8.000000) translate(0.000000, 1.500000)\">\r\n <polygon id=\"Path\" fill=\"#000000\" fill-rule=\"nonzero\" points=\"8.75 0.792893219 14.4571068 6.5 8.75 12.2071068 8.04289322 11.5 12.542 6.99989322 0.5 7 0.5 6 12.542 5.99989322 8.04289322 1.5\"><\/polygon>\r\n <\/g>\r\n <\/g>\r\n <\/g>\r\n <\/g>\r\n<\/svg> <\/span>\r\n <\/a>\r\n <\/li>\r\n <\/ul>\r\n <\/div>\r\n\n\n\n<p>Organizations structure themselves around a holding company for many reasons. Most often, holding companies are established as a tax-efficient way to run a business. This is because a holding company allows owners to take advantage of more favorable tax rates in jurisdictions outside of where they do business. Holding companies are also used to limit potential losses, so that a failure in one part of the business doesn\u2019t impact the wider organization.<\/p>\n\n\n\n<p>No matter what structure your company takes, <a href=\"https:\/\/www.wework.com\/workspace\/on-demand\/all-access\">WeWork All Access<\/a> can support your business with hundreds of professional workspaces around the world where you can collaborate and be productive in a stylish and convenient office space. For even more flexibility, <a href=\"https:\/\/www.wework.com\/info\/wework-on-demand\">WeWork On Demand<\/a> lets you access workspaces and meeting rooms in hundreds of locations in dozens of major cities, without the hassle or constraints of a monthly commitment.<\/p>\n\n\n\n<p>In this article, we\u2019ll take a closer look at how holding companies are used. This is an especially complex topic, with rules and regulations that vary depending on where in the world you are, and on what you want to achieve by starting a holding company. 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15:24:58\",\"field_label\":\"Location\",\"field_key\":\"location_1554993960123\",\"manual_key\":true,\"id\":360,\"beforeField\":\"\",\"afterField\":\"\",\"value\":\"\",\"parentType\":\"list\",\"element_templates\":[\"listselect\",\"input\"],\"old_classname\":\"list-select\",\"wrap_template\":\"wrap\"},{\"objectType\":\"Field\",\"objectDomain\":\"fields\",\"editActive\":false,\"order\":9,\"idAttribute\":\"id\",\"type\":\"phone\",\"label\":\"Phone number\",\"key\":\"phone_number\",\"label_pos\":\"above\",\"required\":1,\"default\":\"\",\"placeholder\":\"\",\"container_class\":\"\",\"element_class\":\"\",\"input_limit\":\"\",\"input_limit_type\":\"characters\",\"input_limit_msg\":\"Character(s) left\",\"manual_key\":true,\"admin_label\":\"\",\"help_text\":\"\",\"mask\":\"\",\"custom_mask\":\"\",\"custom_name_attribute\":\"phone\",\"personally_identifiable\":1,\"drawerDisabled\":false,\"field_label\":\"Phone 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14:50:13\",\"wrap_styles_border\":\"\",\"wrap_styles_width\":\"\",\"wrap_styles_margin\":\"\",\"wrap_styles_padding\":\"\",\"wrap_styles_float\":\"\",\"label_styles_border\":\"\",\"label_styles_width\":\"\",\"label_styles_font-size\":\"\",\"label_styles_margin\":\"\",\"label_styles_padding\":\"\",\"label_styles_float\":\"\",\"element_styles_border\":\"\",\"element_styles_width\":\"\",\"element_styles_font-size\":\"\",\"element_styles_margin\":\"\",\"element_styles_padding\":\"\",\"element_styles_float\":\"\",\"id\":356,\"beforeField\":\"\",\"afterField\":\"\",\"parentType\":\"textbox\",\"element_templates\":[\"tel\",\"textbox\",\"input\"],\"old_classname\":\"\",\"wrap_template\":\"wrap\"},{\"objectType\":\"Field\",\"objectDomain\":\"fields\",\"editActive\":false,\"order\":11,\"idAttribute\":\"id\",\"type\":\"html\",\"label\":\"\",\"default\":\"<p><span style=\\\"font-size: 13.3333px;\\\">By clicking the button below, you agree to our <\\\/span><a href=\\\"https:\\\/\\\/www.wework.com\\\/legal\\\/terms-of-service\\\" target=\\\"_blank\\\" style=\\\"font-size: 13.3333px;\\\">Terms of Service<\\\/a><span style=\\\"font-size: 13.3333px;\\\"> and acknowledge our <\\\/span><a href=\\\"https:\\\/\\\/www.wework.com\\\/legal\\\/global-privacy-policy\\\" style=\\\"font-size: 13.3333px;\\\">Global Privacy Policy<\\\/a><span style=\\\"font-size: 13.3333px;\\\">.<\\\/span><br><\\\/p>\",\"container_class\":\"width 100\",\"element_class\":\"width 100\",\"wrap_styles_border\":\"\",\"wrap_styles_width\":\"100%\",\"wrap_styles_margin\":\"\",\"wrap_styles_padding\":\"\",\"wrap_styles_float\":\"\",\"wrap_styles_show_advanced_css\":1,\"label_styles_border\":\"\",\"label_styles_width\":\"\",\"label_styles_font-size\":\"\",\"label_styles_margin\":\"\",\"label_styles_padding\":\"\",\"label_styles_float\":\"\",\"label_styles_show_advanced_css\":0,\"element_styles_border\":\"\",\"element_styles_width\":\"100%\",\"element_styles_font-size\":\"\",\"element_styles_margin\":\"\",\"element_styles_padding\":\"\",\"element_styles_float\":\"\",\"element_styles_show_advanced_css\":0,\"cellcid\":\"c4246\",\"key\":\"html_1588257629816\",\"drawerDisabled\":false,\"wrap_styles_display\":\"\",\"wrap_styles_border-style\":\"\",\"field_label\":\"\",\"field_key\":\"html_1588257629816\",\"admin_label\":\"\",\"id\":361,\"beforeField\":\"\",\"afterField\":\"\",\"value\":\"<p><span style=\\\"font-size: 13.3333px;\\\">By clicking the button below, you agree to our <\\\/span><a href=\\\"https:\\\/\\\/www.wework.com\\\/legal\\\/terms-of-service\\\" target=\\\"_blank\\\" style=\\\"font-size: 13.3333px;\\\">Terms of Service<\\\/a><span style=\\\"font-size: 13.3333px;\\\"> and acknowledge our <\\\/span><a href=\\\"https:\\\/\\\/www.wework.com\\\/legal\\\/global-privacy-policy\\\" style=\\\"font-size: 13.3333px;\\\">Global Privacy Policy<\\\/a><span style=\\\"font-size: 13.3333px;\\\">.<\\\/span><br><\\\/p>\",\"label_pos\":\"above\",\"parentType\":\"html\",\"element_templates\":[\"html\",\"input\"],\"old_classname\":\"\",\"wrap_template\":\"wrap\"},{\"objectType\":\"Field\",\"objectDomain\":\"fields\",\"editActive\":false,\"order\":12,\"idAttribute\":\"id\",\"type\":\"submit\",\"label\":\"Submit\",\"processing_label\":\"Processing\",\"container_class\":\"\",\"element_class\":\"\",\"key\":\"submit_1554741098461\",\"field_label\":\"Submit\",\"field_key\":\"submit_1554741098461\",\"wrap_styles_show_advanced_css\":0,\"element_styles_show_advanced_css\":0,\"submit_element_hover_styles_show_advanced_css\":0,\"cellcid\":\"c4249\",\"created_at\":\"2019-04-11 14:18:43\",\"admin_label\":\"\",\"id\":359,\"beforeField\":\"\",\"afterField\":\"\",\"value\":\"\",\"label_pos\":\"above\",\"parentType\":\"textbox\",\"element_templates\":[\"submit\",\"button\",\"input\"],\"old_classname\":\"\",\"wrap_template\":\"wrap-no-label\"}];nfForms.push(form);<\/script>\n <script id=\"nf-tmpl-cell\" type=\"text\/template\">\r\n <nf-fields><\/nf-fields>\r\n <\/script>\r\n\r\n <script id=\"nf-tmpl-row\" type=\"text\/template\">\r\n <nf-cells><\/nf-cells>\r\n <\/script>\r\n\r\n \n\n\n<h2 id=\"what-is-a-holding-company\"class=\"wp-block-heading\"><strong>What is a holding company?<\/strong><\/h2>\n\n\n\n<p>A holding company is a business entity that owns one or more <a href=\"https:\/\/www.wework.com\/ideas\/professional-development\/more-than-one-business-idea-7-tips-for-not-going-crazy\">subsidiary companies<\/a> but does not conduct any actual business of its own. A holding company primarily exists to own a controlling stake in other companies, as well as business assets such as <a href=\"https:\/\/www.wework.com\/ideas\/workspace-solutions\/flexible-products\/how-building-operators-can-improve-covid-19-protocols\">office buildings<\/a>, equipment, supplies, patents, and intellectual property.<\/p>\n\n\n\n<p>Also called a \u201cparent company\u201d or an \u201cumbrella company,\u201d a holding company has some managerial oversight over the companies it owns, but it doesn\u2019t control the day-to-day operations. Holding companies are also insulated from most losses incurred by the companies they own, meaning that if a single subsidiary goes bust, outstanding debts cannot be passed on to other companies under the umbrella, or to the holding company itself.<\/p>\n\n\n\n<h2 id=\"purpose-of-a-holding-company\"class=\"wp-block-heading\"><strong>Purpose of a holding company <\/strong><\/h2>\n\n\n\n<p>When people think of holding companies, they tend to think of international corporations seeking to manage their business in the most tax-efficient way possible. But the holding company model can be a useful tool for small- to medium-sized businesses too. <\/p>\n\n\n\n<p>If you\u2019re a small business owner in charge of several companies\u2014for example, if you own three stores across town, each one its own LLC\u2014a holding company helps to minimize risk and shield against cascading losses. You may organize multiple subsidiaries under one holding company and appoint a board of directors to oversee them. This way, it\u2019s possible to ensure that your business assets, such as real estate, are kept safely out of the reach of creditors should one or more subsidiaries face <a href=\"https:\/\/www.wework.com\/ideas\/professional-development\/why-you-should-hire-an-accountant-right-now\">financial problems<\/a>.<\/p>\n\n\n\n<p>That said, a holding company does not offer iron-clad protection against all losses. In many cases, a holding company can still be held liable for some of the debts of its subsidiaries, and it is often always liable for financial fraud and other crimes committed by the companies it owns.<\/p>\n\n\n\n<h2 id=\"advantages-of-a-holding-company\"class=\"wp-block-heading\"><strong>Advantages of a holding company<\/strong><\/h2>\n\n\n\n<p>Just as forming an LLC can protect an individual\u2019s personal assets from debts incurred by their business, forming a holding company can protect a <a href=\"https:\/\/www.wework.com\/ideas\/research-insights\/expert-insights\/how-wework-empowers-you-to-build-a-business-out-of-a-box\">business<\/a> from wider financial losses. <\/p>\n\n\n\n<p>A holding company can experience a capital loss if a company it owns goes under, but legally it cannot be pursued by a bankrupt subsidiary\u2019s creditors. That is to say, if a single subsidiary under a holding company folds, it won\u2019t take other parts of the business along with it. This makes establishing a holding company an effective way to limit liability and shield against losses. <\/p>\n\n\n\n<p>When properly organized, a holding company reduces overall exposure to risk by organizing subsidiaries, so that if one company becomes insolvent, faces a lawsuit, or encounters some other kind of financial trouble, the holding company can keep its most valuable assets away from creditors.<\/p>\n\n\n\n<p>As an example, a large organization could restructure itself by spinning off different parts of the business into separate high-risk and low-risk companies. A construction firm could create a subsidiary company to keep hold of its trademarks and <a href=\"https:\/\/www.wework.com\/ideas\/professional-development\/business-solutions\/what-is-commercial-real-estate\">real estate holdings<\/a>, and another to manage a complex, multiyear building project. That way, if the project goes disastrously wrong and incurs huge losses, the construction firm\u2019s valuable trademarks and property cannot be claimed by creditors and the company can continue to operate. <\/p>\n\n\n\n<p>As well as protecting against liability, a holding company can also offset annual trading losses. Each company completes its own tax returns as usual, but the losses and profits of subsidiaries can be consolidated within the holding company\u2019s tax return. This allows you to offset the losses of one part of the business against the profits of another, reducing your overall tax liability.<\/p>\n\n\n\n<h2 id=\"disadvantages-of-a-holding-company\"class=\"wp-block-heading\"><strong>Disadvantages of a holding company<\/strong><\/h2>\n\n\n\n<p>Restructuring businesses around a holding company is complicated and requires careful management by specialist attorneys, especially if the goal is to <a href=\"https:\/\/www.wework.com\/ideas\/professional-development\/5-tax-tips-entrepreneurs-cant-without\">reduce tax<\/a> liability or to take advantage of low-tax jurisdictions. <\/p>\n\n\n\n<p>Proper corporate structuring is also required when establishing a holding company, to ensure that control is appropriately exercised across the business. If a holding company is too involved with the business decisions of its subsidiaries, it can be considered liable for its finances and legal affairs, too. <\/p>\n\n\n\n<h2 id=\"taxes-for-holding-companies\"class=\"wp-block-heading\"><strong>Taxes for holding companies<\/strong><\/h2>\n\n\n\n<p>Holding companies are often set up to take advantage of low-tax jurisdictions. By locating the holding company in a country or state with a more favorable tax system, a business can effectively shield its profits from being taxed in the country or state where its subsidiaries actually operate.<\/p>\n\n\n\n<p>This type of complex corporate structuring is highly regulated. Depending on where in the world you are, <a href=\"https:\/\/www.wework.com\/ideas\/professional-development\/10-legal-issues-entrepreneurs-need-know\">the laws<\/a> and rules surrounding the relationships between subsidiaries and holding companies can be very different. Finding legal help and employing the services of experienced accountants are necessary to avoid mistakes. <\/p>\n\n\n\n<h2 id=\"how-to-start-a-holding-company\"class=\"wp-block-heading\"><strong>How to start a holding company<\/strong><\/h2>\n\n\n\n<p>Starting a holding company is as straightforward as starting any LLC or corporation, but to structure it effectively and fully transfer the ownership of business assets from the subsidiaries to their parent company, you\u2019ll need comprehensive legal guidance from experts in tax law. <\/p>\n\n\n\n<p>You\u2019ll also need one or more directors to form a board, which can manage the holding company\u2019s operations and oversee subsidiaries. Starting a holding company can be a complex process\u2014and there\u2019s more to it than can be included in this short article\u2014so finding local advisers who are experienced in forming these kinds of business entities is vital.<\/p>\n\n\n\n<h2 id=\"holding-company-vs-an-llc\"class=\"wp-block-heading\"><strong>Holding company vs. an LLC<\/strong><\/h2>\n\n\n\n<p>A holding company can be <a href=\"https:\/\/www.wework.com\/ideas\/professional-development\/business-solutions\/sole-proprietorship-vs-llc\">an LLC<\/a>. The only difference between a traditional LLC and a holding company is that the holding company does not conduct any business of its own. Holding companies don\u2019t create products or manufacture goods\u2014they exist purely to hold ownership of the assets of their subsidiaries.<\/p>\n\n\n\n<h2 id=\"holding-company-vs-a-parent-company\"class=\"wp-block-heading\"><strong>Holding company vs. a parent company<\/strong><\/h2>\n\n\n\n<p>Holding companies and parent companies are essentially the same, but with one key difference. A holding company owns subsidiaries and does not conduct any business of its own, while a parent company holds subsidiaries but continues to have its own business ventures, much like any traditional company.<\/p>\n\n\n\n<p>A parent company could be one that purchases other companies as an investment or to alleviate competition in the market. For example, a popular food brand buying out a rival brand could structure its business as a parent-subsidiary relationship. That is, the parent company would continue to produce its own products while owning and operating the newly bought subsidiary.<\/p>\n\n\n<div class=\"related-articles-sticky related-articles-sticky--sticky-on-desktop\">\r\n <div class=\"related-articles-sticky__holder\">\r\n <div class=\"ray-grid\">\r\n <div class=\"ray-grid__cell--span-full\">\r\n <div class=\"related-articles-sticky__header-wrapper\">\r\n <h3 class=\"ray-text--h3 related-articles-sticky__block-title\">\r\n Related articles\r\n <\/h3>\r\n <\/div>\r\n <div class=\"related-articles-sticky__wrapper\">\r\n \r\n <div class=\"related-articles-sticky__item\">\r\n <div class=\"related-articles-sticky__image-wrapper\">\r\n <a href=\"https:\/\/www.wework.com\/ideas\/professional-development\/how-small-businesses-can-turn-ai-disruption-into-an-advantage\" class=\"ray-image ray-image--1by1\">\r\n <img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" width=\"2912\" height=\"1624\" src=\"https:\/\/www.wework.com\/ideas\/wp-content\/uploads\/sites\/4\/2026\/06\/Screenshot-2026-06-16-at-12.05.28-PM.png?resize=2912%2C1624\" class=\"related-articles-sticky__image\" alt=\"ideas\" srcset=\"https:\/\/www.wework.com\/ideas\/wp-content\/uploads\/sites\/4\/2026\/06\/Screenshot-2026-06-16-at-12.05.28-PM.png?w=2912 2912w, https:\/\/www.wework.com\/ideas\/wp-content\/uploads\/sites\/4\/2026\/06\/Screenshot-2026-06-16-at-12.05.28-PM.png?w=1536 1536w, https:\/\/www.wework.com\/ideas\/wp-content\/uploads\/sites\/4\/2026\/06\/Screenshot-2026-06-16-at-12.05.28-PM.png?w=2048 2048w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/>\r\n <\/a>\r\n <\/div>\r\n <div class=\"related-articles-sticky__container\">\r\n <a href=\"https:\/\/www.wework.com\/ideas\/professional-development\/how-small-businesses-can-turn-ai-disruption-into-an-advantage\">\r\n <div class=\"related-articles-sticky__caption-title\">\r\n How Small Businesses Can Turn AI Disruption Into an Advantage\u00a0\r\n <\/div>\r\n\r\n <div class=\"author\">\r\n By\r\n WeWork\r\n <\/div>\r\n <\/a>\r\n <\/div>\r\n <\/div>\r\n \r\n <div class=\"related-articles-sticky__item\">\r\n <div class=\"related-articles-sticky__image-wrapper\">\r\n <a href=\"https:\/\/www.wework.com\/ideas\/workspace-solutions\/case-study-scaling-a-frozen-fruit-empire-with-wework-all-access\" class=\"ray-image ray-image--1by1\">\r\n <img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" width=\"760\" height=\"428\" src=\"https:\/\/www.wework.com\/ideas\/wp-content\/uploads\/sites\/4\/2026\/02\/Rectangle-12.png?resize=760%2C428\" class=\"related-articles-sticky__image\" alt=\"case study\" srcset=\"https:\/\/www.wework.com\/ideas\/wp-content\/uploads\/sites\/4\/2026\/02\/Rectangle-12.png?w=760 760w, https:\/\/www.wework.com\/ideas\/wp-content\/uploads\/sites\/4\/2026\/02\/Rectangle-12.png?w=400 400w\" sizes=\"auto, (max-width: 760px) 100vw, 760px\" \/>\r\n <\/a>\r\n <\/div>\r\n <div class=\"related-articles-sticky__container\">\r\n <a href=\"https:\/\/www.wework.com\/ideas\/workspace-solutions\/case-study-scaling-a-frozen-fruit-empire-with-wework-all-access\">\r\n <div class=\"related-articles-sticky__caption-title\">\r\n Case Study: Scaling a Frozen Fruit Empire with WeWork All Access\r\n <\/div>\r\n\r\n <div class=\"author\">\r\n By\r\n WeWork\r\n <\/div>\r\n <\/a>\r\n <\/div>\r\n <\/div>\r\n \r\n <div class=\"related-articles-sticky__item\">\r\n <div class=\"related-articles-sticky__image-wrapper\">\r\n <a href=\"https:\/\/www.wework.com\/ideas\/workspace-solutions\/the-real-cost-of-office-space-a-budgeting-guide-for-small-teams\" class=\"ray-image ray-image--1by1\">\r\n <img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" width=\"2749\" height=\"1832\" src=\"https:\/\/www.wework.com\/ideas\/wp-content\/uploads\/sites\/4\/2025\/10\/Web_150DPI-WeWork_People_Activation_Photo_02_031925_add66c.jpg?resize=2749%2C1832\" class=\"related-articles-sticky__image\" alt=\"WeWork\" srcset=\"https:\/\/www.wework.com\/ideas\/wp-content\/uploads\/sites\/4\/2025\/10\/Web_150DPI-WeWork_People_Activation_Photo_02_031925_add66c.jpg?w=2749 2749w, https:\/\/www.wework.com\/ideas\/wp-content\/uploads\/sites\/4\/2025\/10\/Web_150DPI-WeWork_People_Activation_Photo_02_031925_add66c.jpg?w=1536 1536w, https:\/\/www.wework.com\/ideas\/wp-content\/uploads\/sites\/4\/2025\/10\/Web_150DPI-WeWork_People_Activation_Photo_02_031925_add66c.jpg?w=2048 2048w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/>\r\n <\/a>\r\n <\/div>\r\n <div class=\"related-articles-sticky__container\">\r\n <a href=\"https:\/\/www.wework.com\/ideas\/workspace-solutions\/the-real-cost-of-office-space-a-budgeting-guide-for-small-teams\">\r\n <div class=\"related-articles-sticky__caption-title\">\r\n The Real Cost of Office Space: A Budgeting Guide for Small Teams\u00a0\r\n <\/div>\r\n\r\n <div class=\"author\">\r\n By\r\n WeWork\r\n <\/div>\r\n <\/a>\r\n <\/div>\r\n <\/div>\r\n <\/div>\r\n <\/div>\r\n <\/div>\r\n <\/div>\r\n <\/div>\r\n\n\n\n<h2 id=\"examples-of-holding-companies\"class=\"wp-block-heading\"><strong>Examples of holding companies<\/strong><\/h2>\n\n\n\n<p>Perhaps one of the most recent and high-profile examples of the formation of a holding company can be found in the tech industry. Alphabet Inc. was formed in 2015 to bring <a href=\"https:\/\/www.wework.com\/ideas\/professional-development\/management-leadership\/what-does-google-head-of-design-ivy-ross-do-all-day\">Google <\/a>and its many subsidiaries under the umbrella of a single holding company. While Google is by far Alphabet\u2019s largest subsidiary, and its best-known brand, Alphabet does not conduct any business of its own. <\/p>\n\n\n\n<p>This corporate structure allows the tech giant to operate with less risk, while still owning and overseeing a wide range of holdings unrelated to the core Google business. The structure also allows Google to focus more acutely on its internet search services and advertising business, while the other subsidiaries under the Alphabet umbrella can pursue more high-risk and experimental projects.<\/p>\n\n\n\n<p><em>Steve Hogarty is a writer and journalist based in London. He is the travel editor of <\/em>City AM<em> newspaper and the deputy editor of <\/em>City AM Magazine<em>, where his work focuses on technology, travel, and entertainment.<\/em><\/p>\n\n\n<div\r\n data-block_60e8695ae0589\r\n class=\"sticky-cta align sticky-cta--bottom sticky-cta--collection--bottom sticky-cta--right sticky-cta--collection\"\r\n>\r\n <div class=\"sticky-cta__copy sticky-cta--collection__copy\">\r\n <p>Rethinking your workspace?<\/p>\n\r\n <\/div>\r\n\r\n <div class=\"sticky-cta__button-wrap sticky-cta--collection__button\">\r\n <button class=\"ray-button ray-button--primary sticky-cta__button\">\r\n <a\r\n href=\"#nf-form-31-cont\"\r\n class=\"sticky-cta__link sticky-cta--collection__link\">\r\n Get in touch\r\n <\/a>\r\n <\/button>\r\n <\/div>\r\n<\/div>\r\n","protected":false},"excerpt":{"rendered":"<p>Setting up a holding company can help limit losses and shield your business from liability<\/p>\n","protected":false},"author":1849,"featured_media":3000056043,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"template-single-collection.blade.php","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[43910,43902],"tags":[39218,39221,43942],"class_list":["post-3000056037","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-solutions","category-professional-development","tag-small-businesses","tag-entrepreneurs","tag-starting_small"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.4 (Yoast SEO v25.3.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What is a holding company and how do you start one?<\/title>\n<meta name=\"description\" content=\"What is a holding company, and how do you start one? 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